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This podcast covers from START to FINISH How to Acquire a Dental Practice. Michael Dinsio, founder of Next Level Consultants has literally seen hundreds of deals as a banker in the industry & he has personally consulted hundreds of dentists as a Buyers Representative. Michael talks with GUEST SPEAKERS about Due Diligence, Legal, Demographics, and more... He invites experts to the show to help you avoid those headaches and heartbreaks. So start at the TOP w/ Episode 01 and work your way through the transition process. We break it down step by step in a true #UNSCRIPTED and genuine way.
00:02
Oh yeah, here we go practice acquisition. There are pitfalls throughout the entire process.
00:21
If you want to buy a practice, is how folks. Acquisition Unscripted, the truth when buying and selling a dental practice. And now your host, Michael Dinsio. What's up? What's up, guys? Thanks for tuning in again for another episode of Acquisition Unscripted.
00:49
My name is Michael Dinsio. You guys know me, founder of Next Level Consultants. And today we have an in-studio for the folks that are watching an in-studio episode. I'm normally doing this like through like a Zoom thing. And today I get to like talk to my guest and look at the camera and it's a little weird for me, but we're going to do it we're going to have fun. Today's topic is extra special because
01:15
My guest is actually an advisor to me at Next Level Consultants and personally. so today we are breaking down 401ks because I think there is so much value in having like a benefit to your employees these days and dentists are always asking me. And so Brian actually manages Next Level's 401k and he's also a financial advisor to me. so
01:41
Who better to ask my own personal financial advisor and 401k specialist. So Brian Mohorek from Vinobel, he's a partner over there and he is all things 401k. Welcome to the show, my friend. Thanks, Michael. A pleasure to be here. I've been watching your episodes. Big fan. Big fan. Big fan. Well, it's a little different being on screen than it is watching. Absolutely. So.
02:08
Big, picture. So today, guys, we're gonna really just dive into 401k and really just talking about benefits. But I'll kind of lead the witness here a little bit and say, well, actually, before we get into it, tell us a little bit about the noble. Like, what are you guys all about? What's your mission? What's your vision? how do you got what are all the things you do? And then like, maybe just break down.
02:33
401k and I will say usually lose people inside five minutes of us just bragging about ourselves. So I'll do the short. Do the. Yeah. Do the short elevator pitch. So the Noble Group is a wealth management firm, but we have expanded to be all things benefits for businesses and individuals. So we help folks with financial planning, asset management. We do group medical and dental insurance plans.
02:59
We have a partnership with an accounting firm, so we help people with tax consulting. And then my specific expertise is in 401k plans, which I've been doing for 25 years now personally. Before I became a financial advisor, I was a third party administrator and a TPA is what we call them. And a TPA is really an offshoot of the CPA world where they're an expert in just the.
03:23
legal ramifications and filing tax returns and all of the nuts and bolts of how a 401k plan reports to the government. sounds so much fun. It was riveting for a period of time. And there's only so much IRS crap that you can absorb in your life before you want to pull the ripcord. And what I realized was that there's a gap in knowing how a 401k plan runs and actually delivering it to a business owner and the employees. Nice. And that the gap between those two is a financial advisor.
03:53
There are hundreds and thousands of financial advisors who have 401k plans that they rep, but not many of them know all of the rules behind that. shifting to the financial advisory side gives me the chance to be a consultant in all of the things about a plan, making sure that the design and the legal nuts and bolts of it serve you as a plan sponsor and a business owner. And then also
04:19
So we set it up, we choose all the vendors, make sure it's all ready to go and it's going to be tax advantage to you and a good benefit to the people. And then how do we roll it out then? How do we choose the investments that people can choose? And then how we educate the employees and doing that, teaching your employees about why they should be in a plan and why it's important to save for their future and a little bit of a marching band stuff about.
04:45
this great benefit that your employer is offering and things like that. And it can all be done with one, one service provider instead of three or four. love it. mean, I, I can personally speak to the fact that, um, giving people an option for retirement was really something important for me personally. Um, I started investing very early on because my parents made it a priority in my life. And I now,
05:13
I'm now the beneficiary of that in my 40s. And so I'm seeing it and I've got a lot more years left. And so that'll be really fun in the end. And it wasn't because I was the smartest guy in the in the room. It was just because my parents said, hey, put 25 bucks in this plan for every month. And and it's like what? And so so that was really important to me. And so I wanted that for my employees. But where I was going to go with that is I'm shocked now that I've been through a couple of years now.
05:43
how robust and complex it all is. I'm like, yeah, it's just a benefit. It's like a couple of clicks and people put money in it and it's cool, but no, it's not at all. You don't, don't just choose just a random person to do this stuff. Let's just put it that way. And there's a lot of speed bumps and potholes that you can. Yeah. And there's liability from the employer. And I'm just like, what do mean there's liability? Which is why having good professionals that know how to do this coaching you through it. Absolutely. Just like you.
06:13
This is absolutely right. So very cool. Well, the Noble's a great firm and Brian's a great guy. And here we are busting out 401k. And I think how I want to like, start this episode is really just kind of like, in a world where employees, employee retention, hiring people's challenging across all markets, all even in next level and fast food and legal and
06:42
probably your firm and dental. There's this vacuum of of no people willing and able to work for some reason. And so we have to get smarter about how we can approach this next gen millennials and such. And benefits I've heard is very important. And I think the 401k plan, especially by someone buying a practice, I it makes a ton of sense because there's
07:12
selfish benefits to the owner. Forget the passion of wanting your employees to have money when they retire, but like there's a lot of benefits and stuff. And so this is like the easy one to choose instead of medical and all the other things you could go. So so why would someone in a non technical non nerdy way, Brian, because you're way smarter than us in this? Why would someone want to do this?
07:40
Employee recruitment. Employee retention. Yep. Some tax benefits for yourself as the business owner. I like that one. then saving for your own exit strategy. think business owners get so wrapped up. I'm a business owner too. We get so wrapped up in our growth and reinvesting in our business. And eventually we start to focus on, I've got my income that I'm worried about.
08:05
what's further down the path. And so the real trick to retirement savings is that you do it incrementally along the way, which is the example that you used about your parents teaching you along the way. So if you design a retirement plan in the right way, you're going to check all of those boxes. the younger set out there looking for a job now, they have a list of things that they want to look for. Do you have medical and dental insurance? Do you have a retirement plan?
08:29
What kind of PTO policy do you have? And if you're not able to check those boxes on the front end, or at least some of them, some of them, they're, they're, they're moving on. Yeah. It's so true. Help yourself, help your employees take care of some taxes. And there's some benevolence too, right? Americans are terrible savers. Yeah. And so if we can set up a plan that is an advantageous and teach our employees why they should be saving for the future, there's some goodness that comes out of that as well. There is.
08:58
let's dig in a little bit deeper on benefits of creating a 401k plan for the owner. so yes, a lot of employee feel good juices going on now. And we all want to take care of our employees. But let's dive in a little bit deeper on that. You can go you can go a little nerdy if you want now. permission granted. Why would an owner from a tax perspective?
09:26
Really? mean, obviously it's obvious that things compound and you make money, you put money in a plan and it grows. Obviously that makes sense. But from a tax perspective, I feel like that's one of the dark horses of the value of a 401k. that, that sound right? Yeah, absolutely. You get a tax break in them for your own income, for stuff that you shelter into your own accounts. And then you also get a tax deduction for the benefit that you give to your employees. So there's a double win there. But if we, if we design a 401k plan correctly,
09:55
And let's just run with the assumption that somebody's an S corporation. You've got an income up here, but you've got a reportable W-2 income that's smaller. If we design a 401k plan correctly, let's say we've got a doc that's earning $150,000 of W-2 wage, and that's all that's visible for the 401k plan. We don't get to look at all that pass-through income dividend stuff. We could design a plan where an owner might...
10:22
get to put away 40, 50, $60,000 of that 150 as pre-tax savings, reducing that taxable income even more. Yeah. And so that's the big win. So essentially you are able to put more away tax deferred. Correct. And retirement plans, all the legal stuff that goes behind the scenes is comparing benefit, a percentage of income benefit.
10:52
And so, and this is where we get a little nerdy. Here we go. Here we go. Buckle up. nerdy. There's rules that compare the percentage of an owner's compensation that gets put into a plan versus a percentage of employees income that gets put into a plan. And so that's where hiring an expert, it doesn't have to be me, but experts like me can help design this plan so that you're still passing all the rules, but then getting to put a solid amount of money in there. Yeah.
11:19
And that and guys, that's the that's the name of the game. I hate to say it. And that is, well, no one wants to overpay in taxes. And if you have extra and a lot of you might buy bigger practices that throw off extra cash flow, and it's a it's a big jump, that's a big income jump for you. Obviously, those are my favorite acquisitions where you guys are making good money as associates. And then all of a sudden, this is a game changer, even after loan payments service.
11:50
Now you have all this extra income that you don't necessarily rely on because you maybe just left an associate's job making 150. This acquisition gets you to 180 plus a lot of this extra money. What do you do with it? And you know, no one wants to get crazy taxed. We also have the ability if you have a spouse in your life and that spouse is not part of a 401k plan in their own job, you could have your spouse get on payroll with your practice. Yep. And we can
12:20
double up some of these contributions where we might pay a spouse $30,000 of income and then that spouse defers 22,000 of the 30,000 into the 401k plan. Wow. Actually, you just taught me something. So so the percentages are different for employees maybe then there are is that what I heard because I can't put that big percentage of what I made in in Can I if we design it as a safe harbor 401k plan, which is what yours is, okay, so you have that ability.
12:49
Well, I need to hold on to some of my money too. And actually pay for my kids. have cashflow is always a part of the formula for sure. Wouldn't that be amazing if we could just put everything we earned in retirement. We'd need anything else. But if you've got, if you've got a portion of your income and you give a portion of it to your spouse as a W two wage as an employee of the practice, then that spouse could then defer a majority of that into the plan. can't be a hundred percent. Cause there's still some social security. And could you do that with kiddos too?
13:19
If they had a role in the business, they have a role in the business, absolutely. Yeah, absolutely. Folks, I'll say this. I've had a lot of conversations with folks about adding employees on to payroll. know, your CPA is going to be the one that really can chime in and maybe trump this conversation. But sometimes CPAs can get super conservative. But the truth is, is if if you actually are having people do a job,
13:49
give them a job. It's totally legit. Absolutely. And there's just some CPAs that will say, no, don't do that. That's, that's against ethics. Well, if they have a job, they have a job. They might be being paid too much for that job. You're a benevolent job provider. If that have your, your kid come in and help clean up after the end of the day. That's right. Shred papers, organize things, whatever. That's good for your kids too. Anyways, teach them some, thing before we get off that topic.
14:19
a properly designed 401k plan can have a Roth provision in it. So if you have a child, you could even do it for yourself as the business owner that $22,000 of personal wages that you could defer into the plan could be all after tax Roth contributions if you want. Now that takes us down a different path on saving taxes, but let's focus on a child. You've got a child at 16 years old, you're paying your kid.
14:45
let's just say you're giving them $10,000 a year. They could take 8,000 of that and save it into the 401k plan as Roth money. Now that 8,000, whatever it grows to from the time that they're age eight, 16 to when they retire it, whatever, let's just fast forward. And then they're 60 years old, that eight grand growing over time to when they retire, all of that growth is tax-free when it's saved as Roth money. as a business owner and a high wage earner,
15:14
you often can't do a Roth IRA. Roth IRA has a income limitation on whether you can even use it or not, but Roth provisions, which is an after tax contribution, can exist in a 401k plan at the same levels we've been talking about. Nice. Nice. Guys, even I take notes because I learn stuff from episodes and I'm taking notes over here. just
15:39
something popped in my head about a client. And I'm like, I got to have a conversation about their kiddo who's sweeping the floor. Sometimes it helps to have when you've got a practice owner and a spouse. One, the practice owner is doing pre-tax savings and maybe the spouse is doing Roth savings. We fast forward for that couple to their retirement ages. They've got two buckets of money to spend one from. love it. Speaking of spouses, you have an affiliation to dentistry.
16:06
Does your wife do something in My wife is a dental hygienist. She's been in dentistry for 30 years, started as an assistant and then went to hygiene school, and she's been a hygienist now for 20 years. So I have an affinity for dental practices. and just dental practices are a great spot for 401k plans. So through my 25 years of being a 401k specialist, I've probably done 100 plans for practices along the way. And that includes starting to practice
16:33
from scratch with a brand new plan or a practice that's selling to somebody else and whether the purchasing doc should adopt that other plan or not. But just understanding all the ways that the practice works. Let's get into some of that actually. So, okay, let's just paint a picture. So essentially we've gone over the benefits of why employees, yourself from a tax harboring, also you get to put in more.
17:01
than what the government would allow you to without benefit benefit benefit, check, check. Let's talk about options like the different types of options, because I think I think my listeners will be thinking, well, I can't because look, some of the practices that I help people buy, or even startups, they don't have a lot of extra money. So they're like, I can't even afford this. And you know, my employees are already
17:29
speaking of hygienists already making too much money and blah, blah. Never heard that. Never heard that before. I've got folks. I'm always trying to get Brian's wife to work for my client. So she ever needs a job. I got her a job right now. And I'll make sure she gets a lot of money. but, um, so here you are with like a cashflow crunch and you're concerned and you know, you're just trying to make ends meet because let's, let's be honest, maybe 25 % of the deals I do just have this extra gravy train. Most of the deals we're working.
17:58
are thinner, thin enough to cover the loan and you're still making what you did before. It's not like this huge, like, I'm rich moment, maybe 25 % of the time, 75 % of the time is we've got cash flow concerns. And so I do want to talk about options because can we talk about that? Because it's not like this is going to cost you a ridiculous amount and hell, you might not even contribute to the employees contribution. So
18:26
Let's talk about like all those options. Yeah. We started by dangling the carrot of how much gobs of money could go in. But obviously it, the nice thing about 401k plans that they can kind of self-regulate to what's going on with that individual practice or the economy in, in general. if we design a plan that we've got a way to save your own money, that's 401k personal salary deferral, you've got a, perhaps a matching benefit. So that matching benefit is where you're giving some money to your employees and
18:55
It only goes to the people who have signed up. So generally your your younger folks or your maybe lower paid front office staff that are new, they're typically not going to sign up or they're going to sign up to save at a fairly low rate. So your out of pocket expense to them is going to be lower right there. Yeah. And then conversely for the higher paid folks and the ones that want to participate more. Yes. A well designed 401k plan. Let's just use that term safe harbor 401k plan and we can.
19:23
dive into that detail if you want, or people can look it up on their own. A 4 % match. You're matching dollar for dollar of what an employee saves up to 4 % of their pay, and then you're capped there. So really, your maximum exposure as a business owner in this kind of plan is 4 % of compensation, assuming every employee signs up to save 4 % of their pay and not all do. And you can also design a plan to have waiting periods for people to become eligible. You can actually
19:52
have a one-year wait and if or have it be where you typically have turnover. So if you know whether somebody's going to fit your practice in six months, then set your eligibility at six months. If you're having trouble recruiting people, set it for three months. So you, as the business owner, get to decide whether you can save for yourself. So if cashflow gets tight, maybe dial down a little bit of your personal savings.
20:19
So that's where that self-regulation comes from. The third way that money gets into a 401k set. So personal salary, deferral, matching benefit. This third thing is called profit sharing. We call it profit sharing. The technical term is non-elective benefit. It's a way that you can put additional money in the plan, but it is purely discretionary. So if you have a fantastic year, you can dump some more money in this. And then what's the rules on that? Well, that's where that's a whole nother session. But the rules are.
20:48
We can skew the money a little bit more to the owners of the business, but it's a percentage of your compensation. So if you're the highest wage earner, you're going to get the highest number of dollars on the profit sharing that can go into the plan. So another bucket load up. Yeah. And so a fully funded plan for a business owner. if, all of the numbers and demographics work out and an owner could get for next year, $69,000 total.
21:16
money flowing into the plan for just the owner. Now to do that is going to cost some money and the benefits you give to your staff. This third thing, this discretionary bucket is where you, we sit down with you as the business owner and your tax advisor. And we just say, did the year go? Do we, what's our tax bill? Do we want to take some of what we owe to the government and put it in the plan? And then we watch how that it's a circular calculation. You put some more money in the plan, your tax bill goes down and, and those are the toggles that we can work on. And it does get.
21:46
Go ahead. Oh one last thing that profit sharing portion. Uh-huh can have a vesting schedule on it I was just gonna ask that but I didn't know how much we wanted to it the waist. schedule is just ownership. My wheels are going off right now. I'm like, okay. Vesting means ownership. Yeah, so you employees have to earn ownership of that over time. I typically recommend a six-year vesting schedule and that's where
22:11
first year's 0 % vested and then 20, 40, 60, 80, 100. If somebody leaves your practice and they're only 60 % vested and if there's a thousand dollars in that profit sharing bucket, they lose it. They're going to take $400 and they're going to leave, or did I say 60 %? They're going to take 600. They're going to leave 400 behind. Yes. So sorry. That's a retention tool. I bullied into that one because that got me excited. So folks, let me just dummy it down, Denzio style here. So
22:41
Big, big picture, we talked about retention earlier, you know, so even me at next level, we've got some key individuals that would be would be tough to replace. And, you know, big picture, like, it would be really great to have a vesting schedule on extra cash. Like, I had this conversation with my brother in law, which actually, the noble actually helps with him, my brother in law, my sister.
23:10
He works for Amazon and Amazon learned from the best folks. They're really good at giving you lots of benefits, but then there's this huge vesting schedule. And so if he leaves, is leaving a huge chunk of money, but he has to make that decision. And that's why you have this like long retention, maybe when people technically don't want to leave or they want to leave, but they're stuck.
23:37
So it's it's safe to say that Amazon's pockets are a little bit deeper for the kinds of things that they're they're vesting on. But that's the same theory theory. Good theory. Yeah. So in handcuffs versus you may be not not an adult handcuff. Not enough dentists probably go down that path. But that's that's a super cool way. Now, you also don't have to match four percent. You could match zero percent. Right. You could match lower. But then that that eventually impacts how much you can do as an owner.
24:07
Yeah. So the reason I start out of the gate with this safe Harbor matching schedule is that it allows you as the owner to max out your personal deferral. Now, if your compensation is not where you want it to be, or if the business isn't cash flowing the way you want, could remove that safe Harbor status. It's just going to impact how much you can save on your own. Now, can you change it later? Absolutely. But you have to choose your safe Harbor status for whole calendar years. Oh, so you got a year that you're stuck. So
24:35
So startups, if you're thinking startup, or if you're doing a jumpstart, baby practice that you're trying to build from the ground up, it sounds like you could set up a you could offer the benefit to your employees, which is which we already talked about how important that is. You could set up a plan that basically doesn't cost you too much, and that there's very little risk in you having to match so maybe zero contributions for that first year. But then come
25:04
but you're locked in that year. so, and you know, lot of startups are first year, they're not, they're gonna have the extra cash there. And so that might, but you can offer the benefit. Now what's the, again, not to lock you in on pricing and stuff, but you know, talk to you, talk to thousands of other 401k managers. What's like the bracket, like big and small, what a plan could cost admin wise to a company? Like, what are they looking at here? Sure.
25:32
Let's say a typical practice of maybe 10 individuals size. Actually go smaller, go smaller than that. Like five, five people. I think turnkey with, with the administrative work and the investment management. Yep. All of that stuff, probably about 5,000 bucks a year. Okay. Would be total out of pocket now for admin, for admin, not contribution, not contribution. So this is just to run the benefit. Yes. It's also important to bring up.
26:01
now for a brand new plan. So not an existing plan. But if you're going to start a brand new plan, there's incredible incentives that have just been passed by the federal government. So the Secure Act 2.0, thanks. Yeah. Says a brand new plan can get nearly free for the first three years because you get tax credits based on the number of employees that are eligible for the plan. Oh, that's bad. That's a bad tax credit for starting a plan. Okay.
26:28
You can also get some tax credits for the benefit that you put in for your people. Can I end mine right now and start it up again? We could add to an existing plan. Okay. We can add an automatic enrollment feature. Ooh. And that means people have to choose not to be in the plan instead of choosing to be in the plan. This is one of those things where we realize Americans are terrible savers. I would love to do that for next level. Let's put that on the agenda. I'm pissed that I have two employees right now.
26:57
that are not on my plan. they still have the right to say they don't want to be, but we're going to put them in and then they have to say no. Yes. As a, it's, it's, it's a requirement to have a retirement plan. Absolutely. And here's the carrot for that, Michael, you will get a $500 tax credit for three years running done right now. that feature, right in that boom right now. Next level is doing that. Okay. So Abby and Dan love you guys. Let's go. And I'm adding that feature to my own plan. And we've got a hundred percent participation where
27:27
financial advisors and I deeply want all of our employees to participate, but I'm adding the automatic enrollment feature for any new hires. I'm going to get a tax credit for the next three years. I love that. I'm all about getting some tax benefits, but I love that it's a requirement more than anything else. So that's cool. And this is also any new 401k plans starting now, moving forward has to have automatic enrollment in it. And that was also part of the law, the recent launch. Okay. Right on. Well,
27:56
All right. Benefits, options. Hopefully you guys got some really good stuff here. We got another 15 minutes to break down a few other things. So I do want to talk a little bit about like how important it is for saving for your like we talked about why like we talked about how you can do it. But like, I don't know any words of
28:23
wisdom and we don't have to sit on this one too long, but like anything going through your mind about like just in general with with, you know, saving in your plan, like how much and I don't know any words of advice in there. Lots of words of advice. Each person's in cases, individual. Yeah, cover we did cover like how you can double up and you know all that. Most studies say
28:50
that if you save between eight and 10 % of your pay per year throughout your professional working life, and you stay consistent with that. And then obviously if you're in your forties and you haven't been, then you have a little bit more catch up to do, but eight to 10 % of your pay should be put towards retirement goal in general. And sometimes it can be more, but if you stay true to that throughout your working life, you're going to generate a nest egg of money with a proper financial advice and investing in all those caveats.
29:20
that you will be able to just give yourself a paycheck similar to what you earned in your working life from this bucket of money that you generated. 10%, 10 % every year goes into that. And then you'll continue to make that amount of money. And guys, I work a lot on exit planning for sellers. So we're on a buyer and an acquisition program right now, but I can't tell you how many times I've looked at
29:50
sellers financials, and they tell me how much they need to retire and the gap the wealth gap that the financial advisor has told us what we need. And then what they have, and there's this like gap, and then they come to me they're like, Mike, I gotta sell this practice for a bazillion dollars more than what it's actually worth. And then it just creates this like, the buyers who is the audience today, they're like, I'm not paying that. And then so then there's this like,
30:20
and you really want to practice but it's not worth that. that's where it comes from guys is like, actually, this is a really good point because the brokers out there, they have a job to do that they're doing the best they can to represent their seller. Frankly, most of the brokers know it's overvalued, they know. But they have a client that's saying I need this for a wealth gap. And so to that point, Brian's talking about how much to save every year.
30:48
Pay yourself first. Pay yourself first. If you pay in yourself an amount throughout your working life, it makes that negotiation so much less stressful. It's a cherry. Because then it's, yeah, rainbows and unicorns fun when it goes. Yeah, that's right. It's instead of I need to be able to live in my retirement. It's it's actually kind of sad. mean, Dennis and Jenner are known for this. And so if if we could today impart on our audience that look, get serious about this, if you can't make it five percent.
31:18
double up and once things start really going well for you, but put pay yourself first. It's amazing how much you can get by without like, like if you don't put it in, you're going to burn it some way is what I'm trying to say. Like you're gonna buy another Starbucks, you're buy another car, your kids are going to need whatever. But if you don't have it, maybe you won't buy that Starbucks and it's better for you to put it somewhere else. Money awareness is really that topic.
31:46
That's what financial planning is, making sure that your excess cashflow is going into the goals that are important. Cause if you don't have that going towards a goal, then it just fritters away. does. It really does. Um, man, I love this episode. This is good stuff. I, I wish you guys really, I, I wish for you to do this stuff because it, matters. really does matter. Um, one of the, if I jump on one of the things we're finding is that, uh, financial wellness, financial education,
32:16
is becoming an important thing for our younger set that our school system, educational system isn't necessarily teaching people about debt management or what's a stock, what's a bond, what's a mutual fund, what's the S and P 500, these terms that are just ubiquitous across media, but we're all just supposed to intrinsically know it. So if you, a 401k plan or some kind of retirement planning system can be an education for your employees and teach them how to manage their money better. And what we find is
32:45
employees who are less stressed about their money are better employees. Oh, so they're more in tune to the patient. They're more in tune to your practice. They're, they're bought in to what you're doing. They're happier. They're happier. And when people are happier, they're not looking for other jobs. They're not grouchy with their peers. They're, better employees. They're appreciative. My, my team loves us. I mean, we just finished a retreat and I'm proud to say that our team just adores Paula and I because we literally give a shit about them. And
33:15
And and who had the first speaking opportunity? Brian did, because I wanted my team to hear from Brian and start retirement if you're not, because it matters to me. And I agree with that a whole wholeheartedly. Any before we pivot to this last topic is any any tidbits on how Brian how they could get they didn't get it in school?
33:41
And they need a financial advisor, but financial advisors only have so many, so many hours. You're not going to take a one-on-one course with your financial advisor. Like I'm thinking of like, there's a couple at Kaya or Khan Academy. Khan Academy is fantastic. Right. Khan Academy. Yep. And it's all about financial wellness as you called it. Every topic in the world is there. My son's going through a
34:08
And he's trying to apply for the electrical union and he had to take a math test. So I said, Hey, go to Khan Academy and go through some algebra stuff just to kind of refresh the things that we haven't touched. Love it. That's Mr. Khan. I don't remember his first name, but he started this thing and trying to teach his kids things and the financial wellness education stuff in that area. Yeah. Fantastic. Yeah. He just does it from a usability standpoint, really dumps it down. I don't want to say dumb makes the
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understandable without using all the crazy terms. Look, I have an MBA. I actually took a couple courses on this crap. And I'm going to tell you right now, I need help. You know, I was I was looking up the the Treasury bill the other day. Again, I'm a little dork. Sometimes it can be a dork. And I forgot the symbol and I had to send a text to my banker. He's like, we'll put this in. And I'm like, Oh, yeah, what an idiot. 10 year Treasury. So like
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I'm like, this is supposed to be my jam and it's confusing for me. So there's no way that you guys even have a chance at really digging in. Business owners are reticent to talk about money with their employees in a group setting because it's going to open up that door of people. Maybe they're going to ask me for a raise or we might understand the disparity between what a hygienist earns and what an assistant earns. We just don't want to touch that so that it just becomes this verboten topic. Right. Right. So having a financial advisor
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And
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cares about me and gives me access to a financial professional. So you get more bang for your buck. Love, love, love, love everything about that. I, um, uh, to, to, put an explanation point on that point is a couple of my employees at the retreat asked some really good questions. And I was like, love that question for you. Like Brian educated them. And I was like, dude, that's what it's all about right there. It's like, if you can't like,
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leadership, you guys are now leaders, you're not associates. So this pro program is about getting you into ownership. And now you're an owner, and you should be a leader to your team. And it's not just on what you need from them. But it's also what you can impart on them and create better individuals and be a mentor. And if they leave you, they leave you but they won't leave you quickly anyways, if you do this kind of stuff, absolutely make them better people help them with their money, all that stuff. So absolutely.
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The last thing I really want to spend some time on, we're doing so good time management right now. I I love it. But is the last piece is, is okay. So, you know, this is not a fact. It's a feeling percentage. I'd say 90 % of the time when you're buying a practice, it doesn't have a safe harbor or a 401k plan. That's just me gut level and what I've seen. I'd say 10 % do. And so,
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for those buyers buying practices. it's, wanna, let me take a little bit on this because I think it's important. I wanna talk about like, how do you change over? How do you adopt a plan? That's where I'm going with you, Brian. But I wanna talk really quickly about cashflow. So a lot of people are like, I don't wanna start a 401k yet because it's expensive and blah, blah. When I'm looking at a practice, when you're looking at a practice and your advisors are looking at the cashflow.
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that expense is already in the cashflow from years past. So it's already paid for. And your existing staff that you're purchasing are expecting that benefit. So if you don't do it, that's a takeaway. That's a takeaway. And they get pissed about it. So if you're buying this practice and you like the cashflow and the cashflow is working for you, then keep it rolling. Now it does take a minute to set one up. So my suggestion is, is go into that team meeting and say, look guys, the four on play,
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plan is definitely in play. It's going to take me a couple months to get it set up. I am starting in. Unlike medical insurance, you kind of have to figure that out ASAP because they can't be in a gap of medical. But the 401k it's not like, oh my god, I'm losing three months. Like you can set the tone and say, hey, we're rolling with this. I just need to talk to Brian, get this set up. But queue the end of Q1 start of Q2 quarter two.
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We will have a plan and Brian will facilitate that. any, any piece of that that missing when you buy a practice and if there is a 401k plan there, that is a, an asset of that practice. So you could choose to take over that plan if you wanted to. Most brokers and attorneys would advise that you don't. And this, this advisor would advise that you don't take over that plan either, because if you do, you are inheriting any errors that were done in that previous doc only plan. So,
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it's better to have that plan shut down and then start a new one from scratch. Now you can, my wife's practice had a sale in the last two years. Perfect. You're an expert to the show. I've helped do that. So we helped shut down that former, the selling docs plan, and we started a new plan for the purchasing doc and doing a doc that's at the end of their career, their needs for that plan. And that way that plan is designed.
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probably have some things that you don't need for your startup. So when we start this new one, my job was to talk all the employees off the ledge, you know, on this benefit. This plan had a 3 % guaranteed benefit. This one has a matching benefit. That feels like a takeaway. My job is to try to sell that to a certain extent that, hey, this is actually a better plan because you're going to get a 4 % match instead of the 3 % in this specific incident. We can help the employees that have stayed on.
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Transfer roll over their assets from the old plan into the new plan. Okay Help get better pricing if there's money that comes a startup 401k plan with zero assets and it is the most expensive plan to run because Investment vendors make money off of money in the plan. Ah, so if we can go little trade secret there if we can go to those new vendors and say hey, we've got
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$300,000 of transfer assets from the terminating plan that's going to get rolled over into this new one, then the pricing is immediately less expensive because there's going to be assets out of the gate. That makes sense. So there's lots, lots of ways for us to dial in. There's a predictability. And so the vendors might be willing to play more ball. Absolutely. Got it. Absolutely. All right. So on that topic, changing existing plan, I mean, we kind of covered it. Anything else that you can think of? I mean, I couldn't echo louder.
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with any contract or any situation from a from a seller. Like it's the easy way that OK, the easy way is just let's go with the vendors that he chose or she chose. That's that sounds really easy. It's like I already have all the people in place, the vendors and my employees. Guys, easy is never usually the best route. Like when I'm looking at merchant services, I'm looking at
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medical benefits 401k all all the contracts as software deals, marketing campaigns that were 1-800 dentists or yellow page, some of these contracts just suck. And so don't inherit somebody else's business decisions until you've done your due diligence. Maybe the plan actually is good, but just the liability piece of that, that I didn't know that that's that scares me because you you don't
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you don't have control of the decisions made and you might be inheriting a liability and with acquisitions, it's all about stopping liability the day of close with patient care with notes in the system with consent forms with all the things employees hiring employees and the HR manual and all that HR stuff. It's it stops the day of the sale.
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And then guess what? The day that you take over, you're now on stage. You're now making those decisions. And 401k is another example of that. usually a broker has somebody in their sphere that can review that plan and give you some feedback on it. But in most cases, you should let that other one shut down and start with a new. And you don't have to use those providers. And you can find 401k experts like me who will just give you a second opinion.
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And that just becomes a part of my marketing to establish a relationship. You don't have to use me, but I'm happy to review what you've got or review what's out there and tell you what things to look for. Because every product that's out there, we're all selling to each other things. Who's running it? What does it cost? How do I pay for it? Make those decisions. Look at every single one and make, make, make a list. Get an advisor like
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like me get it get get people that are helping you CPA attorney you name it and just work through the problem and and we both got a tick on our throat but I will say that a lot of these decisions that we've talked about in the program this one's not included and excluded that they don't have to be dialed in day one of clothes like there are definitely some things that have to be dialed in payroll
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maybe even QuickBooks and you obviously need your insurances and there's stuff and we've talked about it in the program. But then there's a lot of things that can wait too. And I find that the type A audience that you all are, the dentists are very type A. They went through school, they're doing the textbook, they're passing the tests, they're taking the boards, they're getting shit done, right? They're very type A.
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They want to get everything done before it closes. And that's impossible. And this is a perfect example of don't worry. We're going to put this in play, give it a minute to all your due diligence, make sure you're choosing the right person. Yep. Starting a 401k plan from scratch takes about two months minimum. Boom. From the time that you make a decision to when money can start flowing into it. But the plan that's terminating from the doc that you bought the practice from, there can be overlap of those two.
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It's not this one ends on this date and this one begins on this day because that is an asset of that selling owners business. Got it. That made me think last question. We're going shut this bad boy down because it's been an awesome, awesome episode. Can you grandfather people right in without a waiting period? Absolutely. When you start a brand new plan, you can say everybody employed on this specific date is immediately eligible for the plan. And then we have a waiting period for new hires.
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That's a way to take care of the people that you've inherited. Boom. So guys, look, savings, retirement benefits, all so relevant to dental acquisitions and employee retention and hiring. it's just, it's just such a, it's a passion for me. So I'm glad we were able to do this today, man. Thanks for having me. It's been a lot of fun. Man. You're good. Guys. Brian's contact information will be below. We also should put in con.
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Academy link so that you guys know what's up with that. And then maybe some contact information for Brian so you guys get a hold of him. Do you take can you can you help people nationwide or is it just? Yeah, I'm licensed by the Securities and Exchange Commission. So federal entity. So folks, if you're in the middle of Kansas, Brian can help you so super happy to have you on and it's a pleasure doing business with you, Awesome opportunity. Thank you. All right. Well, another episode shut down and guys, thanks again.
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Follow us on Facebook, Instagram, YouTube, all the stuff. We're actually getting ready to launch a new brand. This is a brand, Dental Unscripted. We've got the startup one. We've got the acquisition one. We're getting ready to start a practice management one with my partner, Paula, and our front office coach, Stefani. And that's gonna be all practice management stuff, systems, communication. Man, they're gonna go off on all kinds of stuff. And so,
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I'm excited, stay tuned. The brand is building out awesome content that's specific to your needs and this particular one is acquisitions and thanks again for tuning in. Talk to you guys later. Tune in next time for another truth-filled episode of Acquisition Unscripted. We want to hear from you.
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interact with your host Michael Dencio. Follow us on Facebook, Instagram, and YouTube. Comment and subscribe.